CN-12:Ten Key Projects Program

Policy Description

The “Ten Key Projects” program is a key element of China’s Medium and Long-Term Plan for Energy Conservation《节能中长期专项规划》 and is incorporated into the 11th FYP (Five Year Plan) and 12th FYP to support the national binding goal of reducing energy intensity (energy consumption per unit of GDP). Under the 11th FYP, the billion dollar effort provided financial incentives for local governments and industry to pursue a wide range of energy-saving projects.

Description

The “Ten Key Projects” program is a key element of China’s Medium and Long-Term Plan for Energy Conservation (《节能中长期专项规划》), which was developed in 2004. The Ten Key Projects have been incorporated into the 11th Five Year Plan (FYP) and the 12th FYP to support the national binding goal of reducing energy intensity (energy consumption per unit of GDP) and carbon intensity (carbon dioxide emissions per unit of GDP).

11th FYP:

The energy-saving target for the Ten Key Projects in the 11th FYP was 240 million tonnes of coal equivalent (Mtce). The programme provided financial incentives for local governments and industry to pursue a wide range of energy-saving projects.

A detailed implementation plan of the Ten Key Projects was issued by the National Development and Reform Commission (NDRC) in July 2006. The Implementation Plan of the Ten Key Projects in the 11th Five-Year Plan (《“十一五”十大重点节能工程实施意见》) specified goals and tasks for each of the ten projects and identified implementation organizations.

To incentivize enterprises, the central government also provided financial rewards for energy-savings. Eligible projects under the Ten Key Projects could apply for financial rewards for energy-saving from the central government. During the 11th FYP, enterprises were rewarded at a rate of 200 RMB for every tonne of coal equivalent (tce) saved per year for enterprises in East China to 250 RMB for every tce saved per year for enterprises in Middle or West China (see CN-7).

In industry, to receive the rewards, projects must have been in the following categories of the Ten Key Projects:

1) coal-fired boiler (furnaces) retrofits;

2) district cogeneration projects;

3) waste heat and waste pressure utilization projects;

4) conservation and substitution of oil; and

5) motor system energy conservation projects.

Minimum energy savings for each eligible project must have been over 10,000 tce (0.29 PJ).

By the end of the 11th FYP (2010), the central government had allocated 8.1 billion RMB in the central government budget for the Ten Key Projects and had allocated another 22.4 billion RMB as special funding. In total, more than 5,100 projects were implemented under the “Ten Key Projects” programme. It is estimated that the cumulative energy-savings of the Ten Key Projects was about 340 Mtce during the 11th FYP. Funding for the Ten Key Projects mainly came from the enterprises’ own funds, third-party financing, and the central government. Central government funding represented about 5% of the total investment for the Ten Key Projects.

12th FYP:

At the start of the 12th FYP, the Ten Key Projects programme was continued and expanded. According to the Comprehensive Plan of Energy Conservation and Emission Reduction of the 12th Five-Year Plan (《“十二五”节能减排综合性工作方案》), the Ten Key Projects programme includes

1) boiler and furnaces retrofits;

2) motor system energy conservation;

3) energy system optimization;

4) waste heat and waste pressure utilization;

5) conservation and substitution of oil;

6) building energy conservation;

7) green lighting;

8) demonstration projects of energy-saving technologies;

9) energy-saving projects and appliances;

10) promotion of energy performance contracting, and

11) energy conservation capacity building.

The energy-saving target for the Ten Key Projects in the 12th FYP is 300 Mtce. By 2015, China aims to improve operation efficiency of industrial boilers and furnaces by 2% and 5%, respectively, from the 2010 level. Motor systems efficiency is targeted to improve by 2-3%. Waste heat and waste pressure utilization is expected to increase by 20 gigawatts.

The financial rewards for energy-savings have been continued in the 12th FYP as well. The rate of rewards has been increased to 250 RMB per tce-saved for East China, and 300 RMB per tce-saved for Central and West China. The threshold of minimum energy savings to qualify for the financial rewards was reduced from 10,000 tce to 5,000 tce in the 12th FYP (see CN-7).

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Agencies Responsible

National Development and Reform Commission State Council

Primary Objective: Energy

Objective

- Increase energy efficiency through adjusting and optimizing the economic structure;
- Promote energy-efficient technologies;
- Establish a strict management system (i.e. to carefully track energy use at the facility level) at the company level;
- Establish effective incentive mechanisms;
- Energy intensities of major products in key industries are expected to reach or approach the advanced international level achieved at the beginning of 21st century

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

Quantitative Target? yes

Progress Monitored? yes

Verification Required? no

Enforced? yes

Requirements on the Target Group

Applicants have to undergo an energy audit, demonstrate that they have adequate accounting and management systems in place, and show that the individual project applied for will save at least the equivalent of 10,000 Mtce

Support by Government

Provide funding and technical assistance centers

Implementation Toolbox

As one of the key measures to achieve China’s national energy intensity targets, China has been promoting energy-efficient technologies since 2008. At the end of 2013, the National Development and Reform Commission (NDRC) published six National Key Energy-Efficient Technology Promotion Catalogues. In December 2014, NDRC updated the previous six catalogues, with a total of 183 technologies. NDRC has also since published a draft of the seventh catalogue and is in the process of seeking public comments. The Seventh National Key Energy-Efficient Technology Promotion Catalogue includes a total of 22 technologies, covering power, iron and steel, non-ferrous metals, petrochemicals, chemicals, building materials, light industries, machinery, transport, buildings, and communications industries.

Typically, every published catalogue includes a technical introduction of the technology, energy-saving and cost information of a typical project (such as applicable conditions, capacity, investment cost, energy-savings, and emission reductions), current penetration level, and projections for the next five years (including penetration target, total investment, total energy-saving potentials, and total carbon reduction potentials).

The total program saved 150 Mtce (4.4 EJ) through 2008 - The total program has reported an expected saving of 260 Mtce (7.6 EJ) (excluding oil substitution) below 2010 BAU (end of the 11th FYP).

Estimated costs/benefits for industry

Central government funding (in various forms) represented about 5% of the total investment for Ten Key Projects (the rest of the investment costs are covered by the companies themselves)

Estimated cost for government

By 2010, the central government had allocated 8.1 billion RMB in the central government budget for the Ten Key Projects, and allocated another 22.4 billion RMB as special funding. In total, more than 5,100 projects were implemented under the “Ten Key Projects” programme.

The Institute for Industrial Productivity welcomes information on relevant industrial efficiency policies or measures that are not currently included in the database or if information in this database is incorrect or out-of-date.
Please address your input to info@iipnetwork.org.